Prosecutors Amend Indictment for Gyeongnam Bank Executive Lee Mo
Embezzlement Amount Doubled for Detained Head of Investment Finance Department
An executive of Gyeongnam Bank, who was arrested and indicted on charges of embezzling a large sum of money from the bank, was found to have embezzled an additional 165.2 billion won during the prosecution's investigation. The total embezzled amount increased from 143.7 billion won to 308.9 billion won. He was investigated to have spent more than 70 million won per month, living in a luxury villa in Samseong-dong, Gangnam-gu, Seoul, and purchasing various luxury goods.
Gold bars and cash exchanged with embezzled funds by Mr. Lee, Head of Investment Finance Department at BNK Gyeongnam Bank [Photo by Seoul Central District Prosecutors' Office]
The Crime Proceeds Recovery Division of the Seoul Central District Prosecutors' Office (Chief Lee Hee-chan) announced on the 21st that it had additionally confirmed that Mr. Lee, head of the Investment Finance Department at Gyeongnam Bank, embezzled 165.2 billion won of real estate project financing (PF) loan funds and applied to the court for an amendment to the indictment. This was due to the discovery of an additional 165.2 billion won embezzlement.
According to the prosecution, Mr. Lee conspired with Hwang (52, detained and indicted), an employee of Korea Investment & Securities, and from November 2014 to July last year, forged and used withdrawal slips 20 times to transfer 228.6 billion won of company money to accounts such as paper companies and then used it arbitrarily.
Previously, from July 2008 to September 2018, he was investigated to have embezzled 80.3 billion won of company money using the same method alone. Together with his friend Mr. Hwang, from 2008 to 2022, he created false documents to raise loans related to real estate PF developers who had never requested loans and embezzled the loan funds.
Cash and checks hidden in a kimchi container by Mr. Lee, head of the Investment Finance Department at NK Gyeongnam Bank, and his in-laws [Photo by Seoul Central District Prosecutors' Office]
Also, when trust companies deposited loan principal and interest repayment funds into Gyeongnam Bank accounts at the request of the developers, he mainly used withdrawal slips to withdraw and embezzle the money.
The two used 271.1 billion won of the 308.9 billion won embezzled funds to cover the principal and interest of PF loan funds. The amount spent on living expenses for Mr. Lee and his family reached 37.8 billion won. Mr. Lee and his family lived in a villa in Samseong-dong and spent 11.7 billion won on living expenses, including purchasing various luxury goods. It was investigated that 8.3 billion won was used to purchase real estate and 15.6 billion won was used to purchase hidden assets such as gold bars.
They also sent 1.4 billion won overseas for their children's study abroad expenses and deposited 700 million won with overseas companies for investment immigration.
The prosecution began an investigation after Gyeongnam Bank filed a complaint in July, arrested Mr. Lee who fled the following month, and indicted him along with Mr. Hwang. Subsequently, through extensive analysis of account holders, seized materials, and investigations of related parties such as developers, it was confirmed that 308.9 billion won in damages occurred in 18 PF projects of Gyeongnam Bank.
The prosecution also identified and indicted eight others involved in the crime, including Mr. Lee’s family and money launderers.
Mr. Lee’s older brother, A, who had a prior record of money laundering, was found to have actively participated in the crime by introducing professional money launderers when the scale of embezzlement became too large for him to launder alone.
The laundered criminal proceeds were used to purchase gold bars and were dispersed and hidden in three officetels. When the investigation into the embezzlement began, Mr. Lee’s wife was found to have withdrawn 400 million won, part of the embezzled amount, and stored it in a kimchi container inside a kimchi refrigerator at their residence.
The prosecution has secured 18.7 billion won worth of criminal proceeds so far, including seizing 101 gold bars worth 8.3 billion won from Mr. Lee’s hideout. They also confiscated and preserved assets worth 5.23 billion won, including Mr. Lee’s golf membership and real estate. Additionally, 700 million won of the money Mr. Lee sent overseas for his children’s study abroad expenses was frozen through confiscation and preservation.
The prosecution stated that through this investigation, they confirmed the illegal symbiotic relationship between economic offenders and money launderers and clarified the methods of concealing criminal proceeds. They also pledged to strictly punish illegal economic offenders and do their utmost to recover criminal proceeds.
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